How to profit from and enjoy each other’s personal and professional strengths in business.
Choosing a partner in business is just as important as choosing the right marriage partner, yet many people “fall into bed with” someone in business and "wake up" later wondering what happened. It starts innocently enough, as a fun idea over drinks after-hours, then suddenly it can take on a personality of its own and can overwhelm a friendship or other relationship with all the sticky details of running a business. The stress builds and soon the partners can hardly stand each other, from the varying ways they prioritize business activities, different approaches with clients or employees, and annoying personal habits they bring to the office.
We all know roughly the statistics on marriages that break up citing financial reasons…is it any wonder that most business partnerships end for similar reasons? However, most often financial problems are symptom of relationship problems or partnership “personality” challenges.
Creating Great Partnerships for Great Business:
I. Choose the right partner; this critical step is often flubbed up. Take time for discussions about many aspects of the business, go through what-if scenarios, and expectations.
II. Create the partnership business plan and agreement together before the business really takes off. Both of these are best when kept simple but usable. Hire an attorney familiar with partnership contracts, and actually go through the process of discussing and agreeing. (I believe this step alone could prevent as much as 50% of future partnership dissolution.)
III. Check to see if you have the same dream, as far as what the business provides. Are you assuming early retirement and moving to the Caribbean, when your partner is planning to work in the office daily until they pry his cold, dead fingers from the desk? What about the vision for the business? Maybe one partner is expecting to expand into new markets, while the other feels it ruins the integrity of the business to grow beyond one location. It takes conversation and brainstorming strategically (and sometimes a facilitator or coach) to be on the same page. And agreement; what may seem like a grudging compromise can grow into a solution where both partners are truly happy.
IV. Establish policies, guidelines, or protocols for doing business and handling common activities. What criteria do you use in decision-making? Do half your employees follow one partner’s guidelines, and half the other’s? Do your staff members feel they get caught in the crossfire? Consider how this affects the work environment, the clientele, the bottom line.
Many partnerships go through “the Good, the Bad, and the Ugly” phases and sadly most that get to this point break up. Some come to another end, hopefully with an arrangement that allows them to resume their former camaraderie without financial strain. Some partners buy the business, others agree to switch to silent/investor-only/limited partnerships and let the more business-talented partner act as business owner, and others form a custom arrangement that allows for win/win.
Then again, some partners (the few, the proud) work out their differences, get their purpose, mission, and goals aligned, and become Great Partnerships, running Great businesses. Yes, it is worth some consideration. After all, you were attracted to the idea of working together once upon a time…
ACTION: Answer the following questions separately, and then discuss together.
*What made the partnership such a great idea back then?
*What are the top 3 things your partner brings to the partnership?
*What do see as the top 3 things you bring to the partnership?
*How can you work together to create more positive business results?
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Through the end of June 2010: SWOT Analysis for Business Owners. Up to three partners, same price as one owner. Only $350.
Also great for Partners: “Purpose, Mission, Goals” 3 month coaching program, only $1500. Focus is on where all the time, money, and effort goes, and specifically what long- and short-term results are expected. What results would you like to change first?